CoBank Issues Quarterly Economic Review

CoBank says the recent rebound in the U.S. economy is real, but the sharpest post-shutdown economic gains are almost certainly behind us, and a long grind to shore up a shaky economy lies ahead. Despite COVID-19, U.S. grain has been moving and basis has generally tightened since April 1. Ethanol production and margins began to recover during the second quarter, but coronavirus resurgence is likely to limit future demand. The U.S. chicken sector swiftly filled retail meat cases when demand shifted and the red meat supply dropped. CoBank expects around three percent industry growth for the sector in 2020. Beef production and prices have now returned to pre-pandemic levels, and concerns are now shifting from supply to demand. The pork industry has rebounded from a supply chain shock that saw U.S. production fall by nearly half, before climbing back to above prior-year levels two months later. Finally, dairy farmers struggled through extreme market volatility last quarter. Dairy prices are recovering, although farmers have yet to benefit.